Inps: average wages have not recovered purchasing power

The average wages of private workers (excluding domestic servants) rose nominally between 2014 and 2024 by 14.7 per cent while those of public workers rose by 11.7 per cent at a rate below the rate of inflation. This can be read in the 'Analysis of the salary dynamics of public and private employees' prepared by the Inps Actuarial Statistical Coordination presented on Thursday, 15 January, according to which in 2024 the average annual salary for private employees was €24,486 while that of public employees was €35,350. However, if one looks only at contractual wages and not at actual wages that take into account overtime etc. between 2019 and 2024 there was a gap between nominal wage increases and price increases of more than nine points.

In the private sector, women continue to have much lower average effective wages than men. "The gender pay gap is confirmed," it says. In fact, the average annual pay of women is about 70 per cent of that of men. For example, in 2024 the average pay of women is just under 20,000 euro (19,833 euro), that of men almost 28,000 euro, although compared to 2014 the average pay of women has grown more (+17.5%) than that of men (+13.5%). The gender pay gap is only partly explained by the lower number of paid days for women (240) compared to men (251)."

In the last two years, however, Inps points out, there has been a growth in real wages also thanks to low inflation and the aforementioned time gap of contract renewals. Finally, it should be borne in mind that wage increases are correlated to the dynamics of labour productivity, which in our country is conditioned by structural factors such as sectoral composition and low technological innovation. The conclusions are different if we analyse net wages, after the intervention of contribution and tax concessions, which for lower incomes have allowed a higher recovery than inflation to reach an almost complete recovery at the median wage level.

An analysis of net wages between 2014 and 2024, rather than gross wages, shows higher increases and greater resilience of household purchasing power, especially for the lower middle income brackets. In practice, high incomes have defended themselves more on the market, albeit incompletely against inflation. In contrast, medium and low incomes on the market (gross wages) performed less well, but were helped by general taxation interventions, almost cancelling out the impact of inflation.